Bajaj Finance reported mixed Q3 results, with improved asset quality metrics offsetting concerns over declining profitability. While the financial services company saw its net profit drop below market expectations, the improvement in non-performing asset ratios indicates better loan portfolio management.

Financial Performance Overview

The company's Q3 consolidated results revealed contrasting trends across key financial and asset quality metrics:

Asset Quality Shows Improvement

Bajaj Finance demonstrated notable improvement in asset quality during the quarter. The gross NPA ratio declined to 1.21% from 1.24% on a quarter-on-quarter basis, reflecting better loan recovery and collection efficiency. More significantly, the net NPA ratio improved substantially to 0.47% from 0.60% in the previous quarter, indicating effective provisioning and write-off management.

Management Clarifies Provision Strategy

A company executive provided important context regarding the financial results, stating that the higher one-time provision represents a proactive and voluntary action by the company. This clarification suggests that Bajaj Finance is taking deliberate steps to strengthen its balance sheet and maintain conservative provisioning practices.

Profit Performance Below Expectations

Despite improved asset quality, the consolidated net profit of ₹39.8 billion represented a decline of 6.1% compared to ₹42.4 billion in the same quarter of the previous year. The actual profit figure fell substantially below analyst estimates of ₹53.00 billion, creating a variance of approximately 25.1% from market expectations.

Revenue Growth Momentum Continues

The company maintained strong revenue performance with Q3 revenue reaching ₹186.6 billion, marking an impressive year-on-year growth of 18.3% from ₹157.7 billion. This robust top-line expansion suggests continued business momentum and successful customer acquisition strategies across various financial products.

Performance Analysis

The quarter's results present a mixed picture with positive asset quality trends countering profitability concerns. The management's clarification about proactive provisioning indicates a conservative approach to risk management. While improved NPA ratios demonstrate effective collection processes, the voluntary higher provisions may reflect the company's commitment to maintaining strong financial health amid evolving market conditions.

Bajaj Housing Finance has announced robust financial results for the quarter ended December 31, 2025, demonstrating strong operational performance across key metrics. The housing finance company showcased significant year-on-year growth in profitability and business expansion, reinforcing its position in the housing finance sector.

Financial Performance Highlights

The company delivered impressive financial results for Q3FY26, with substantial improvements in both profitability and asset growth.

Profitability and Revenue Growth

Bajaj Housing Finance's net profit after tax increased by 21% to ₹665 crore in Q3FY26, compared to ₹548 crore in the corresponding quarter of the previous year. The profit before tax also grew by 21% to ₹865 crore from ₹713 crore year-on-year. Net interest income demonstrated strong momentum, rising 19% to ₹963 crore from ₹806 crore in Q3FY25.

Asset Quality and Business Expansion

The company maintained healthy asset quality metrics while achieving significant business growth. Assets under management expanded by 23% to ₹1,33,412 crore as of December 31, 2025, compared to ₹1,08,314 crore in the previous year. Loan assets similarly grew by 23% to ₹1,17,305 crore from ₹95,570 crore year-on-year.

Corporate Governance and Leadership

The Board of Directors also approved the appointment of Shri Ajay Kumar Choudhary as an Additional Director (Independent) effective March 1, 2026, for a tenure of five consecutive years, subject to member approval. Choudhary brings over three decades of experience from the Reserve Bank of India, where he served as Executive Director until October 2023.

Operational Efficiency

The company demonstrated improved operational efficiency with operating expenses to net total income ratio improving to 19.0% in Q3FY26 from 19.8% in Q3FY25. However, loan losses and provisions increased to ₹56 crore from ₹35 crore in the previous year quarter, including a ₹10 crore management overlay release.

Source: Bajaj Housing Finance Limited quarterly results announcement